Investor A bought a call option, and investor B bought a put option. All else equal, if the interest rate increases, the value of investor A's position will ________ and the value of investor B's position will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Correct Answer:
Verified
Q1: A call option with several months until
Q2: The value of a call option increases
Q4: A stock with a current market price
Q5: The Black-Scholes option-pricing formula was developed for
Q6: Investor A bought a call option that
Q7: A stock with a current market price
Q8: The percentage change in the call option
Q9: All else equal, call option values are
Q10: A put option with several months until
Q11: The intrinsic value of a call option
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